Dubai: At the far end of the Al Khasab Cove on the K Frond of the Palm Jumeirah stands the villa which is at the centre of a tax evasion controversy.
Owned by Bollywood icon Shah Rukh Khan, Villa K-93 was allegedly given to the actor by developers Nakheel in 2007. Four years later, Khan is embroiled in a dispute with Indian tax authorities for not declaring the house as taxable property.
Driving down the trunk of The Palm, entry into the K Frond wasn't guaranteed.
While the trunk has open access to residents and visitors alike, the fronds are securely guarded.
Driving down the nearly empty streets, the villas looming on either side are large and imposing. At the tail end of the road lies Villa K-93. At first glance, Khan's 7,000 square foot whitewashed villa is palatial, yet rustic and rural with tiled rooftops. The perfect holiday home, or so it seems.
The grass is newly-planted; the two-door garage has bright white paint on the shutters; the property secured by black metal fencing all around. However, the back of the villa has no security gates. A small bush borders the perimeters of the backyard, with an open walkway onto the beach.
A stray cleaner takes his laundry off the clothes rack. Inside, the grass is wet and freshly mowed. Black cane patio furniture surrounds a pool that's approximately 15 feet by eight feet.
The venue was apparently the scene of a lavish New Year's Eve party on December 31. Little did the actor realise that this perfect holiday home might land him in hot water upon his return to India earlier this month.
A giift or taxable
Barely was Khan back from Dubai when he was served a notice by India's Income Tax (IT) Department asking him to pay tax for the Dh14.4 million Dubai property. The actor had maintained that the villa was a gift from Nakheel and therefore did not constitute his income from business or profession as per Indian laws.
In his IT returns for 2008-2009, Khan showed the villa as a gift received from Nakheel on September 16, 2007. However, after scrutinising Khan's returns, the IT department held that the villa was taxable. The department has even initiated penalty proceedings against the actor for "furnishing inaccurate particulars and income".
It has alleged that the villa received by Khan "under the guise of a gift" is "actually a consideration in return for lending his name to promote the company".
To bolster its case, the department has reportedly even dug out photographs of Khan performing at Nakheel's Annual Day function from the company's website along with an article that quoted Khan praising the project. "The above material clearly indicates that the company [Nakheel PJSC] was keenly interested in using assessee's [Khan] image and brand for publicity of its Palm Project, and the same has been used in perpetuity since 2004," read the notice.
Despite the developers using Khan's name for endorsing the Palm Jumeirah project since 2004 on its official website as well as in print and electronic media, they maintained that the actor's appearance at the Annual Day function was purely a gesture of goodwill towards Nakheel's Executive Chairman Sultan Ahmad Bin Sulayem.
There was no immediate comment available from Nakheel. However, Gulf News reported on January 11 that Nakheel submitted a letter to the IT department in October saying that Khan had not provided them with any professional services.
A Bollywood birdie said the actor chose the villa on the K Frond for reasons more than just being able to rub shoulders with the country's rich and famous.
K, as all his fans know, is the initial by which he's famously known: King Khan. The number of the villa, 93, when added up, totals 12, the sum of all the letters in Shah Rukh Khan's name. Indeed, the actor gives new meaning to the term signature villa!
